Sunday, December 7, 2008

Excess, Largesse, Repossess

Vanity Fair features a fascinating article in its January issue pertaining to the narcissian tumble of the Wall Street investment bankers and hedge fund managers of the past six months. It's absolutely incredible that so striking a contrast can be seen in an industry that less than a year ago was thriving; drawing the best (and arguably greediest) minds and paying the multi-million dollar salaries to rain-makers in the their mid to late 20's!

Personally, I am torn about the fall. The losses in pension funds and 401k's for hardworking people is a dangerously tragic turn, especially for those (who were) close to retirement. But I find myself subconsciously pleased to see the high rollers of Wall Street take a hit. The unending stream of stories revealing their utter largesse and "let them eat cake" attitudes show a segment of society whose selfish dealings and ignorant speculation have brought the greatest nation in the world to a grinding halt.

One example, of many: "Tired of the 90-minute commute, Joe bought a helicopter for the ride. When he realized the chopper couldn’t fly to Manhattan in inclement weather, he got a seaplane." Many will say that Joe earned what he made, that it was his prerogative to buy a seaplane for his 90 minute commute... for days when his helicopter couldn't do the job... (sigh)

This, however, is a falsehood. The truth is that these 'bankers', using the term extremely liberally, took the money others (re: us) entrusted to them to invest wisely, as their predecessors had done and whose reputations they mortgaged. Greed, and a lack of repercussions until now, led those bankers to leverage every dollar into twenty dollars, for example, in speculative investments. As they saw it, on the off chance a particular bet wouldn't pay off, their other irons in the fire would provide them with the multi-million dollar bonus at the end of the year. As VF so aptly puts it: "Groups like the Operative Plasterers and Cement Masons International Association Local 262 and the Fire & Police Pension Association of Colorado—these were among the plaintiffs who hadn’t even known they were part of the gilded age. Only they were: Lehman’s bankers had used their retirement money to make those 40-to-1 bets and live like princes. Now that money was gone."Criminal. Now these same bankers are turning the tables and working for the government, trying to untangle the mess they themselves created. I could go on about this ad nauseum, but I'll close this post with a poignant quote from Philip Howard that sums up the opportunity we all now face: "So this end of the new gilded era—it’s like a bucket that spilled, and finally the money spilled out, and we were left with a culture whose sense of purpose and responsibility were lacking. And now there’s a real need for people, and society as a whole, to rethink and re-structure their values."